In the market for loanable funds, as the interest rate rises the and the .

Question

Quizplus · Accepted Answer

As the interest rate rises, savers and investors are incentivized to save and lend more, leading to an increase in the quantity of loanable funds supplied. However, borrowers are less likely to borrow at higher interest rates, leading to a decrease in the quantity of loanable funds demanded. Therefore, the answer is C - the quantity of loanable funds supplied increases, while the quantity of loanable funds demanded decreases.

In the Market for Loanable Funds, as the Interest Rate